9/02/2004 @ 6:30PM

Welcome To The Club

For players in the National Football League, size matters. Linemen tip the scales north of 300 pounds. Coaches like their quarterbacks taller than 6 foot 2. But for the owners, size is not so important. In other sports, a team’s market size often is the determining factor in whether the team and owner are a financial “have” or “have-not.” But in the NFL, teams in big markets like New York and San Francisco struggle financially, while small-market teams in Green Bay, Wis., and Nashville, Tenn., thrive. It’s all about the stadium you play in. And one of the biggest revenue generators at new stadiums is “club” seating.

Chicago’s historic Soldier Field reopened last year after a $655 million renovation. The original pillars from 1924 were left in place, but almost everything else was brand new. Among the stadium’s new amenities are 8,500 extra-wide, padded club seats. These seats average $250 compared to $65 for regular seats and generated $18 million for the Bears last year. Smaller-market teams are also benefiting from new or renovated stadiums. The Green Bay Packers, who play in the league’s smallest TV market, added more than 3,000 club seats priced at $200 last season as part of their renovation of Lambeau Field. Like the Bears, the Packers sold out their club seat inventory and generated $8 million for the team.

Club seats can generate millions in extra revenue for NFL teams. All the teams on our worst list are seeking new stadium deals.

The Best

The Worst

Team

Club Seat Revenue ($mil)

Washington Redskins

$33

New England Patriots

26

Tampa Bay Buccaneers

20

Denver Broncos

20

Chicago Bears

18

Team

Club Seat Revenue ($mil)

Dallas Cowboys

$0

Minnesota Vikings

0

San Francisco 49ers

0

New York Jets

.4

New York Giants

.4

Club seats are loosely defined as seating with added benefits like access to a private club, seat cushions or extra roomy. Only three NFL teams remain without club seats. The three holdouts–Dallas Cowboys, Minnesota Vikings and San Francisco 49ers–are all clamoring for new stadiums loaded with high-priced club seats. Meanwhile New York’s two teams, the Jets and Giants, are also looking for better stadium situations that include more than the 142 club seats at Giants Stadium, where both teams currently play. Even the cash-flush Washington Redskins aren’t sitting still. They recently added to their club seat inventory at
FedEx
Field, bringing the total to more than 16,000, the most in the NFL.

The popularity of club seats is largely a result of the NFL’s economic model. The NFL’s 32 teams evenly split the league’s biggest revenue source, its eight-year $17.6 billion television contract with
Fox Entertainment
,
Viacom
and
The Walt Disney Co.
. Teams also equally share licensing revenue and gate receipts. That means teams are forced to find alternative revenue streams if they want to differentiate themselves financially. With club seats, the premium on top of the base ticket price can fall under different revenue-sharing rules than general tickets. As many as half of NFL teams, including the Bears and Packers, are exempt from doling out the normal 34% share of club seat revenue to the league’s other teams. This money gets redirected towards paying off debt on the new or renovated stadiums. So, the teams get a new stadium and the other NFL teams foot the bill for a big chunk of it. In addition to the rich ticket premiums that go along with club seats, teams earn 25% to 50% more concession revenue per person in club seats versus general seating thanks to waiter service and higher-priced items, according to Chris Bigelow, president of sports marketing firm Bigelow Companies.

Big-market teams in Washington, D.C., and New England are among the top-five club seat revenue producers. The Redskins have 2,300 club seats more than any other team, while the Patriots sell ten-year leases on all of their seats that can cost $7,500 per season. Meanwhile, two midmarket teams with loyal fan bases are also near the top. Tampa has 1.6 million TV households compared to 7.4 million in New York City. After years of lukewarm support, an improved team and a new stadium have caused Buccaneers fans to flock to
Raymond James
Stadium since it opened in 2000. Today, the Bucs have a season-ticket waiting list of 110,000 people for their games. Their 12,000 club seats sell for as much as $335 per game and generated $20 million for the team last year.

The Denver market is even smaller than Tampa with 1.4 million TV households, but Broncos games have sold out for 35 consecutive years. Yet, it wasn’t until the team opened Invesco Field in 2001 that the team joined the league’s financial elite. Armed with 8,800 club seats at the new stadium that generated $20 million for the team last year, the Broncos turned a profit of $43 million.